WASHINGTON - The Internal Revenue Service (IRS) is improving its efforts to modernize its

information technology systems and related business practices, according to a new report from

the Treasury Inspector General for Tax Administration (TIGTA).

As required by the IRS Restructuring and Reform Act of 1998, TIGTA assessed the adequacy

and security of the IRS's information technology. The IRS relies extensively on its computer

systems to administer our Nation's tax laws. It is currently engaged in a multi-year, multibillion-

dollar Business System Modernization Program (Modernization Program).

Since last year's assessment, the IRS has developed and implemented significant systems to

improve the tax return processing environment, and additional improvements and upgrades are

being developed and implemented, TIGTA found. As such, TIGTA supports the IRS's request

to change the status of the Modernization Program from a material weakness to a deficiency.

TIGTA also noted that the information technology operations program has implemented bestpractice

principles designed to improve efficiency and effectiveness. However, computer

security remains a material weakness, and the IRS needs to continue its emphasis and attention

on becoming a security-conscious organization, TIGTA found.

"The IRS has generally improved its management of the Modernization Program," said J.

Russell George, Treasury Inspector General for Tax Administration. "However, we suggest that

the IRS consider this Program to be high-risk and continue to stress improvements in both its

processes and performance."

Because this was an assessment report of the IRS's Information Technology Program through

Fiscal Year 2011, TIGTA did not offer any recommendations. IRS officials were provided an

opportunity to review and comment on the report.